A closely followed measure of U.S. consumer confidence in August reached its highest level since October 2007, the Conference Board announced Tuesday.
The board’s Consumer Confidence Index jumped 2.1 points in August to 92.4, its highest level since before the financial crisis and Great Recession.
“Consumer confidence increased for the fourth consecutive month as improving business conditions and robust job growth helped boost consumers’ spirits,” Lynn Franco, the New York-based group’s director of economic indicators, said in the monthly report. “Looking ahead, consumers were marginally less optimistic about the short-term outlook compared to July, primarily due to concerns about their earnings. Overall, however, they remain quite positive about the short-term outlooks for the economy and labor market.”
The Conference Board’s survey measures what people feel about their present conditions and what their expectations are for the future. The August reading of their current conditions continued to improve, with those describing economic conditions as good edging up and those describing it as bad falling slightly.
The number of survey respondents saying jobs are plentiful also jumped in August, while those who said jobs are hard to get fell slightly.
“This is a good report. It indicates that consumer confidence is maintaining itself at elevated levels and starting to gain traction,” Chris Christopher, director of U.S. economics for forecaster IHS Global Insight, said in an investor note. “In addition, the rise in consumer confidence indicates that retail sales in August are likely to be more robust than July’s poor performance.”
That view was shared by economists at RDQ Economics in New York, who said in an investment note that consumers “are pulling out of their prolonged funk.”
On another positive note, the Commerce Department said orders for durable goods — big-ticket items such as planes and cars — shot up by a record monthly gain of 22.6 percent in July. But the unusually steep monthly rise came largely because Boeing Corp. logged $80 billion in orders for its 777X. Even without Boeing’s orders, July was unusually strong, because orders for motor vehicles were also up by double digits.